Knowing when to audit financial statements is a key question that every business owner and chief accountant needs to understand to ensure compliance. Independent Auditing Law 2011 and implementing guidelines. In the context of Vietnam's deeply integrated economy, financial transparency is not only a legal obligation but also a "passport" that helps businesses access capital and build trust with stakeholders.
According to statistics from the Ministry of Finance, tens of thousands of businesses are required to disclose information annually. financial statement filing Audited financial statements are available. Understanding when financial statements need to be audited helps entities proactively handle tax settlements, minimize systemic errors, and avoid heavy administrative penalties from competent state authorities. Let's explore the details of the latest legal regulations and scale thresholds applicable from 2025 with MAN.
Entities required to have their financial statements audited according to legal regulations.
Determining when financial statements need to be audited must first be based on the list of mandatory entities stipulated in the Law on Independent Auditing No. 67/2011/QH12 and Decree No. 17/2012/ND-CP, especially the important additions at Decree 90/2025/ND-CP.
Foreign direct investment (FDI) enterprises
All FDI enterprises Businesses operating in Vietnam, regardless of capital size or business type, are all included in the list that answers the question of when to need to... audit of financial statementsThis is the group entities that are required to undergo auditing. Annually, they report on the use of funds and tax obligations to the State.
This regulation aims to control cross-border investment flows and ensure the accuracy of related-party transactions. Timely audits facilitate FDI enterprises in repatriating profits and providing explanations to tax authorities during inspections.
Financial, credit, and insurance institutions
Commercial banks, credit institutions, finance companies, insurance companies, and insurance brokers are always required to strictly comply with auditing regulations. For these entities, questions about when financial statements need to be audited are often related to the annual accounting period or public offerings of financial instruments.
The unique nature of the financial industry demands extremely high system security. Therefore, financial reporting audited by an independent third party is a prerequisite for maintaining operating licenses and protecting the rights of depositors and insurance policyholders.
Public companies and listed organizations
For companies listed on the stock exchanges (HOSE, HNX) or registered for trading on UPCoM, the answer to the question of when financial statements need to be audited is annually and every six months. This is a mandatory requirement of the State Securities Commission to protect individual and institutional investors.
The table below summarizes the traditional mandatory subjects:
| Target group | Legal basis | Frequency of execution |
| FDI enterprises | Independent Auditing Law 2011 | Annual |
| Credit institutions | Law on Credit Institutions | Annual |
| Public company | Securities Law 2019 | Annual Review & 6-Month Review |
| Insurance companies | Insurance Business Law | Annual |
New regulations for large-scale businesses (Effective from 2025)
A major turning point in Vietnam's accounting legal system is the determination of when financial statements need to be audited based on a threshold of operational size. According to Decree 90/2025/ND-CP, businesses that do not fall into the specific categories mentioned above are still required to undergo mandatory audits if they reach the "large scale" threshold.
Criterion 2/3: Business Size
A business is considered to require an audit of its financial statements if, in the immediately preceding fiscal year, it satisfies at least two of the following three criteria:
- Number of employees: On average, the number of participants is over 200 per year.
- Total revenue: Achieved over 300 billion VND this year.
- Total assets: The balance sheet shows a figure exceeding 100 billion VND at the end of the year.
This regulation reflects the government's efforts to enhance transparency for businesses with significant socio-economic impact. When the size of an entity exceeds these thresholds, internal governance becomes complex, leading to the need to determine when financial statement audits are necessary to protect the interests of shareholders and business partners.
Comparing mandatory audit size thresholds from 2025
From 2025, regulations on the mandatory audit threshold for financial statements will be clearly defined based on criteria related to labor, revenue, and total assets. Understanding and comparing these thresholds helps businesses proactively assess their audit obligations, prepare resources, and improve their accounting systems in a timely manner, avoiding being caught off guard when mandatory audits arise.
| Criteria | Required threshold | Note: Identify |
| Average labor | > 200 people | Based on employment contracts with a term of 3 months or more. |
| Total annual revenue | > 300 billion VND | Includes revenue from sales and services. |
| Total asset value | > 100 billion VND | Based on the ending balances in the financial statements. |
If your business is approaching these figures, preparing yourself and having the resources to know when a financial statement audit is needed is crucial. This gives the accounting department time to review documents and reconcile records before the auditors begin their work.
When is an audit of financial statements required for voluntary purposes?
Besides strict legal regulations, in reality, many businesses proactively seek auditing services. So, specifically, when is it necessary to audit financial statements for management purposes or for the needs of a third party?
Serving the purpose of raising capital and obtaining bank loans.
Most commercial banks now require audited financial statements when businesses apply for medium and long-term loans. Banks need objective assurance that the client's financial data is truthful and accurately reflects their repayment capacity. Therefore, when financial statements need to be audited, it often coincides with the time when the entity plans to expand production and business or invest in new projects.
In M&A transactions and business valuation
In mergers and acquisitions (M&A), the buyer often requires the seller to provide audited financial statements from reputable firms such as MAN. Knowing when to audit financial statements at this stage helps the parties agree on a business valuation based on "clean" data, minimizing post-transaction disputes.
Enhance credibility and transparency with partners.
For businesses bidding on large projects or collaborating with multinational corporations, audited financial statements are a huge competitive advantage. The question of when to audit financial statements is no longer "is it mandatory?" but rather "when should it be done to optimize brand image?".
Timing of the audit: Key milestones
Understanding when and which entities need to be audited in financial statements is not enough; businesses must also be aware of the timeline to avoid violating reporting requirements.
Deadline for signing the audit contract.
According to current regulations, entities subject to mandatory auditing must sign a contract with an independent auditing firm no later than 30 days before the end of the fiscal year. For example, if the fiscal year ends on December 31st, you must finalize the contract before December 1st. Determining when financial statements need auditing early helps businesses choose a suitable auditing firm with reasonable fees.
Audit season and reporting deadlines
The peak audit season in Vietnam typically falls in the first quarter of each year (January to April). For state-owned enterprises, the deadline for submitting audit reports is usually 90 days from the end of the fiscal year. FDI companies also usually have to submit reports before March 31st to the Tax, Statistics and Investment Planning authorities. Knowing when financial statements need to be audited and scheduling appointments with auditors will help avoid overload and errors due to rushing.
Conclude
Determining when financial statements need auditing is a complex problem requiring a deep understanding of the law and keen risk management skills. Compliance with auditing regulations not only helps businesses avoid administrative penalties but also opens up opportunities for international cooperation, affirming their position and reputation in the market. From 2025 onwards, with new size thresholds, the number of entities requiring auditing will increase significantly, demanding that managers be thoroughly prepared in terms of their accounting systems.
Understanding the difficulties businesses face in determining when financial statement audits are necessary, MAN – Master Accountant Network proudly offers: financial statement auditing services Professional, reputable, and up to standard. With a team of experienced auditors who possess in-depth knowledge of the Vietnamese tax system, we are committed to providing honest, objective reports and valuable advice to improve your accounting system.
Service contact information at MAN – Master Accountant Network
- Address: No. 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City
- Mobile/Zalo: 0903 963 163 – 0903 428 622
- Email: man@man.net.vn
Other services
- Internal audit services
- Internal Control System Assessment Service
- Auditing services on request
- Professional tax audit services
- Construction auditing services
- Completed project settlement audit service
Content production by: Mr. Le Hoang Tuyen – Founder & CEO MAN – Master Accountant Network, Vietnamese CPA Auditor with over 30 years of experience in Accounting, Auditing and Financial Consulting.
Answering frequently asked questions about when financial statements need to be audited.
What is the penalty for FDI enterprises that fail to conduct audits?
According to Decree 41/2018/ND-CP, the failure to conduct financial statement audits for mandatory entities may result in a fine of VND 40,000,000 to VND 50,000,000. Therefore, understanding when financial statement audits are necessary is the best way to protect your company's budget.
Should small businesses voluntarily get audits?
While not mandatory, if you're planning to raise capital or prepare for an IPO in the next 3-5 years, you should start determining when you need to have your financial statements audited now. This helps build a transparent and professional financial history.
Can financial statement auditing replace tax finalization?
Independent auditing and tax settlement are two different activities. However, knowing when to audit financial statements and doing it well will standardize your accounting data, making the subsequent tax settlement process faster and less likely to result in back taxes.
